AMERICAN WATER REPORTS SOLID THIRD QUARTER 2026 RESULTS
American Water Works Company, Inc. (AWK) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 October 28, 2026 Investor Contact: Aaron Musgrave Vice President, Investor Relations 856-955-4029 aaron.musgrave@amwater.com Media Contact: Maureen Duffy Executive Vice President, Communications and External Affairs 856-955-4163 maureen.duffy@amwater.com AMERICAN WAT
How this was made
The 30-second read
Why it matters
The reaffirmed guidance and new 2027 EPS range suggest continued earnings momentum, likely supporting the stock price.
Market read
Primary earnings and guidance update for a large utility; directly relevant to investors in AWK and the broader utility sector.
What to watch
Potential regulatory risks in pending merger with Essential Utilities could temper enthusiasm.
American Water reports solid third quarter 2026 results, narrows 2026 EPS guidance to top half of range, affirms long-term targets and initiates standalone 2027 EPS guidance reflecting growth of 8%.
Third-quarter adjusted diluted EPS increased to $2.00 from $1.89, regulated-business net income rose to $407 million from $383 million, and the company narrowed 2026 adjusted EPS guidance to $6.07 to $6.12. GAAP diluted EPS was unchanged at $1.94, while unfavorable weather, higher operating costs, depreciation and interest expense tempered results.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Operating revenues, three months ended September 30GAAP | $1.51B | – | $60 million |
| Operation and maintenance expense, three months ended September 30GAAP | $531M | – | – |
| Depreciation and amortization, three months ended September 30GAAP | $245M | – | $18 million |
| General taxes, three months ended September 30GAAP | $94M | – | – |
| Total operating expenses, net, three months ended September 30GAAP | $869M | – | $30 million |
| Operating income, three months ended September 30GAAP | $641M | – | – |
| Interest expense, three months ended September 30GAAP | −$167M | – | $9 million |
| Interest income, three months ended September 30GAAP | $3M | – | – |
| Income before income taxes, three months ended September 30GAAP | $499M | – | – |
| Provision for income taxes, three months ended September 30GAAP | $112M | – | – |
| Net income attributable to common shareholders, three months ended September 30GAAP | $387M | – | – |
| Basic earnings per share, three months ended September 30GAAP | $1.94 | – | – |
| Diluted earnings per share, three months ended September 30GAAP | $1.94 | – | – |
| Adjusted diluted earnings per share, three months ended September 30non-GAAP | $2.00 per share | – | – |
| Total net adjustments to diluted earnings per share, three months ended September 30non-GAAP | $0.06 | – | – |
| Operating revenues, nine months ended September 30GAAP | $4.07B | – | $212 million |
| Operation and maintenance expense, nine months ended September 30GAAP | $1.50B | – | – |
| Depreciation and amortization, nine months ended September 30GAAP | $722M | – | $60 million |
| General taxes, nine months ended September 30GAAP | $272M | – | – |
| Total operating expenses, net, nine months ended September 30GAAP | $2.50B | – | $103 million |
| Operating income, nine months ended September 30GAAP | $1.57B | – | – |
| Interest expense, nine months ended September 30GAAP | −$497M | – | $32 million |
| Interest income, nine months ended September 30GAAP | $18M | – | – |
| Income before income taxes, nine months ended September 30GAAP | $1.16B | – | – |
| Provision for income taxes, nine months ended September 30GAAP | $265M | – | – |
| Net income attributable to common shareholders, nine months ended September 30GAAP | $898M | – | – |
| Basic earnings per share, nine months ended September 30GAAP | $4.56 | – | – |
| Diluted earnings per share, nine months ended September 30GAAP | $4.56 | – | – |
| Adjusted diluted earnings per share, nine months ended September 30non-GAAP | $4.63 per share | – | – |
| Total net adjustments to diluted earnings per share, nine months ended September 30non-GAAP | $0.07 | – | – |
| Infrastructure improvements and growth investment, first nine months of 2026other | $2.8B | – | – |
| Regulated acquisitions investment, first nine months of 2026other | $437M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Regulated Businesses, three months ended September 30Authorized revenue increases from completed general rate cases and infrastructure proceedings for recovery of incremental capital and acquisition investments, as well as incremental revenue from closed acquisitions. | Operating revenues increased $60 million | – | $60 million |
| Regulated Businesses, nine months ended September 30Authorized revenue increases from completed general rate cases and infrastructure proceedings for recovery of incremental capital and acquisition investments, as well as incremental revenue from closed acquisitions. | Operating revenues increased $212 million | – | $212 million |
2026 and 2027 standalone outlook
- Note2026 adjusted EPS guidance range: $6.07 to $6.12
- Note2027 standalone adjusted earnings per share guidance range: $6.53 to $6.63
- NoteLong-term EPS growth: 7-9%
- NoteLong-term rate base growth: 8-9% (including acquisitions)
- NoteAcquired customer addition growth: 2%
- NoteLong-term dividend per share growth: 7-9%
- NoteUpdated standalone capital investment plan: $20+ billion for 2026-2030 and $48+ billion for 2026-2035
- Note2027 standalone capital investment plan: $4.1 billion
Capital returns
- Quarterly cash dividend payment of $0.8950 per share, declared October 27, 2026, payable on December 1, 2026 to shareholders of record as of November 12, 2026.
- Long-term dividend per share growth target of 7-9%.
What drove it
- New rates were in effect in the third quarter, and rate implementation supported revenue growth in the Regulated Businesses.
- Since January 1, 2026, the company has been authorized additional annualized revenues of $284 million, including $179 million from general rate cases and $105 million from infrastructure surcharges.
- The company has general rate cases in progress in five jurisdictions and infrastructure-surcharge filings in two jurisdictions, representing a total annualized incremental revenue request of $360 million.
- Approximately 81,000 customer connections were added from acquisitions through September 30, including the Nexus Water systems.
- Three states have approved the proposed merger with Essential Utilities, and settlements have been reached in Pennsylvania, North Carolina and Texas.
Concerns
- Unfavorable weather reduced Regulated Businesses operating revenues by $18 million in the three months ended September 30, 2026 and $7 million in the nine months ended September 30, 2026.
- Operating expenses increased due in part to higher purchased water cost and usage and increased purchased power and chemicals costs.
- Higher depreciation expense reflected increased capital investment.
- Interest expense increased as a result of incremental short- and long-term debt primarily to fund capital investments and acquisitions.
- The 2026 adjusted EPS guidance range excludes transaction costs related to the proposed Essential Utilities merger, weather impacts and incremental interest income through February 13, 2026 related to the amended HOS seller note.
What to watch
- Execution of the five general rate cases and two infrastructure-surcharge filings, which represent a total annualized incremental revenue request of $360 million.
- Delivery of the approximately $3.7 billion 2026 capital investment plan and the $4.1 billion 2027 standalone capital investment plan.
- The effects of weather, purchased water, purchased power and chemicals costs on regulated-business results.
- Progress toward closing the Essential Utilities merger by the end of the first quarter of 2027 as anticipated.
- The pace of acquisition-related customer additions and regulatory recovery of acquisition investments.
Balance sheet and cash flow
- Cash and cash equivalents were $121 million at September 30, 2026, compared to $98 million at December 31, 2025.
- Total long-term debt was $13,990 million at September 30, 2026, compared to $12,780 million at December 31, 2025.
- Short-term debt was $1,449 million at September 30, 2026, compared to $1,588 million at December 31, 2025.
- Current portion of long-term debt was $898 million at September 30, 2026, compared to $1,479 million at December 31, 2025.
- Total common shareholders' equity was $11,931 million at September 30, 2026, compared to $10,837 million at December 31, 2025.
- The company invested $2.8 billion in infrastructure improvements and growth during the first nine months of 2026, including $437 million for regulated acquisitions.
- The 2026 capital investment plan is approximately $3.7 billion, including acquisitions.
Analysis
American Water reported solid third-quarter execution. GAAP diluted EPS was $1.94, unchanged from the prior-year quarter, while adjusted diluted EPS increased to $2.00 per share from $1.89 per share. For the first nine months, GAAP diluted EPS rose to $4.56 from $4.47 and adjusted diluted EPS rose to $4.63 from $4.40. The difference between GAAP and adjusted third-quarter EPS reflected weather, income-tax and pending-merger adjustments in the reported reconciliation.
Revenue growth was driven by regulatory execution and acquisitions. Operating revenues were $1,510 million for the third quarter versus $1,451 million a year earlier, while Regulated Businesses operating revenues increased $60 million. The company attributed growth to authorized revenue increases from completed general rate cases and infrastructure proceedings, plus incremental revenue from closed acquisitions. Since January 1, 2026, authorized additional annualized revenues totaled $284 million, and the company has rate-related proceedings seeking $360 million of total annualized incremental revenue.
Costs moderated the translation of revenue growth into GAAP EPS growth. Total operating expenses, net, were $869 million versus $837 million, including depreciation and amortization of $245 million versus $226 million. Interest expense was $(167) million versus $(158) million as debt funded capital investment and acquisitions. Unfavorable weather reduced regulated-business operating revenues by $18 million in the quarter. The company cited higher purchased water, purchased power and chemicals costs, alongside increased depreciation, as expense pressures.
Capital deployment remained substantial. The company invested $2.8 billion in infrastructure improvements and growth during the first nine months, including $437 million for regulated acquisitions, and stated that its approximately $3.7 billion 2026 capital investment plan is on track. Cash and cash equivalents were $121 million at September 30, 2026, and total long-term debt was $13,990 million. The company also declared a quarterly cash dividend of $0.8950 per share.
Management narrowed 2026 adjusted EPS guidance to $6.07 to $6.12 and initiated standalone 2027 adjusted EPS guidance of $6.53 to $6.63. It affirmed long-term EPS growth of 7-9%, rate base growth of 8-9% including acquisitions, and dividend-per-share growth of 7-9%. The proposed Essential Utilities merger remains a major execution item, with three state approvals and settlements in Pennsylvania, North Carolina and Texas, while the company continues to target closing by the end of the first quarter of 2027 as anticipated.
Management, verbatim
The company has delivered solid results to date in 2026, including key regulatory outcomes that provide for a reasonable and timely return on the investments made for the benefit of our customers.
John Griffith, President and CEO of American Water
Looking forward to 2027 and beyond, we are fully confident that our long record of consistent execution on the plans we set will continue.
John Griffith, President and CEO of American Water
On the merger front, we continue to work toward closing the merger with Essential Utilities by the end of the first quarter of 2027 as anticipated.
John Griffith, President and CEO of American Water
Not in the filing
stated, not guessed- Gross profit and gross margin
- Operating cash flow
- Free cash flow
- Share repurchases
- GAAP EPS guidance
- Revenue guidance
- Operating-expense guidance
- Tax-rate guidance
- Prior outlook section for formal actual-versus-prior-guidance comparison
- Standalone segment revenue amounts for Regulated Businesses
- Quarter-over-quarter comparisons for reported income-statement metrics
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was checked against the filing text, and a metric whose value, prior period and change do not add up is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
American Water Works Company (NYSE: AWK) filed an 8‑K reporting Q3 2026 results and updated guidance.
Ticker impact
American Water reported adjusted Q3 2026 EPS of $2.00 and narrowed 2026 guidance to $6.07‑$6.12, reaffirming long‑term targets and issuing standalone 2027 guidance.
likely upward pressure as investors price in updated earnings outlook and narrowed guidance range
Guidance reaffirmation and a higher midpoint for 2027 EPS suggest continued growth, supporting a bullish bias.
Market effects
Utility sector may see modest uplift as a large water utility demonstrates solid earnings and growth prospects.
North American utility investors could benefit from the reaffirmed outlook.
Limited to water and utility investors; no broad macro impact.
Counterpoint
If the market has already priced in the guidance, the stock may face limited upside.
Key entities
- companyAmerican Water Works Company, Inc.
US‑listed water utility reporting Q3 results and guidance.
- companyEssential Utilities, Inc.
Merger partner; regulatory approvals pending.
